If Pacific Gas and Electric Co. or its parent company seek bankruptcy protection because of the financial squeeze they face due to the last two seasons of California wildfires, it should not affect customers’ ability to keep the lights on, experts say.

PG&E is reportedly exploring a bankruptcy filing for some or all of its business due to the multibillion-dollar liabilities the San Francisco company could face in the wake of historically devastating wildfires in 2017 and 2018, including the Camp Fire in Butte County.

The utility, not the parent company PG&E Corp., filed for bankruptcy protection in 2001 because of the energy crisis that was gripping the state at the time. It emerged from bankruptcy three years later. PG&E now finds itself in its greatest period of financial pressure since then.

Ultimately, PG&E may avoid a bankruptcy filing this time. But the drastic step is being considered, according to Reuters, prompting questions about the fate of the energy company and its customers.

How would bankruptcy affect PG&E’s ability to operate? Should PG&E seek protection under Chapter 11 of the U.S. Bankruptcy Code, the immediate impact on electricity customers would be “almost negligible,” said UC Berkeley energy economist Severin Borenstein.

“The power plants are not going to stop operating, the employees are not going to stop going to work,” Borenstein said. “The whole point of Chapter 11 bankruptcy is to keep a company running while it figures out how to deal with, generally, the idea that they don’t have enough cash flow to cover their obligations.”

In theory, a reorganization through Chapter 11 bankruptcy should not make customers’ bills skyrocket unnecessarily, according to Lynn LoPucki, a UCLA law professor with expertise in bankruptcy proceedings.

“The tendency of a bankruptcy would be to make rates end up lower than they otherwise would be because the company is shedding debt,” he said. “If they have less debt, they have lower expenses. If they have lower expenses, then the Public (Utilities) Commission should be reducing the rates.”

However, if the company needed to borrow before it emerged from Chapter 11 protection, it would probably face steep interest rates, LoPucki said. That might cause bills to rise in the short term, though regulators would have to approve the increase.

How would bankruptcy affect employees? PG&E’s 20,000-member workforce may feel more of a direct impact if the company’s leaders pursue bankruptcy reorganization.

Bankruptcies are “generally not good news for employees,” whose retirement plans can be hurt, according to Borenstein. Bonuses and big pay raises tend to halt, and leadership can turn over, he said.

Would wildfire victims still see payouts? In corporate bankruptcy proceedings, secured bondholders are owed first, with general creditors and accident victims — such as wildfire survivors — further in line, according to Douglas Baird, a University of Chicago law professor.

What about shareholders? Shareholders often fare poorly in bankruptcies. “Any money that’s left over, then the rest goes to shareholders,” Baird said. Shareholders have already taken a hit: PG&E stopped paying dividends in December 2017 to conserve cash, and shares have dropped more than 60 percent since the Camp Fire broke out in November.

How might bankruptcy affect the environment? PG&E had plans to play a big role in the state’s efforts to fight climate change, including potentially building a network of electric-car charging stations. Under a judge’s supervision, investments in clean technologies could be curtailed, Borenstein said.

“I could very well see the judge saying, ‘You’re gonna have to let somebody else lead the fight against climate change; you gotta focus on staying financially viable,’” he said.

How could PG&E be restructured? Should PG&E go through bankruptcy reorganization, it’s not clear what the company would look like on the other side.

One option could include selling off the utility’s gas assets and putting the proceeds in a fund to help pay for wildfire costs, as National Public Radio has reported the company is considering.

Sales like that happen “all the time” as part of bankruptcy proceedings, Baird said.

State regulators have already said they plan to look at whether PG&E should split its gas and electric operations into separate companies. They are looking into more fundamental changes as well, including the possibility of breaking PG&E up into smaller regional entities and whether the system should be publicly owned — all options that could be considered during any bankruptcy proceeding.

J.D. Morris is a business reporter covering energy, including PG&E, Tesla and California’s clean power initiatives.

Before joining The Chronicle, he was the Sonoma County government reporter for the Santa Rosa Press Democrat, where he was among the journalists awarded a Pulitzer Prize for their coverage of the 2017 North Bay wildfires.

He was previously the casino industry reporter for the Las Vegas Sun. Raised in Monterey County and Bakersfield, he has a bachelor’s degree in rhetoric from UC Berkeley.